How I'd Size a Quantum Portfolio: The 37% Rule and a Three-Tier Allocation

The most common quantum question I've gotten this year is simple: "Is now a good entry point?" My honest answer is maybe. And that's not "I don't know" — it's "it depends on the framework you're using to decide."

Before I get to the dollar splits, I need to address the decision itself.

The 37% Rule: Watch Before You Move

The 37% rule from mathematics says to spend the first chunk of your time before any big decision just observing. Learn what good looks like. Build your baseline. Then move when something beats everything you've watched so far.

Most people who buy quantum stocks don't have a baseline. They saw a headline, they saw a chart, they jumped in with everyone else. They don't know what the four architectures are. They don't know which companies have revenue and which are pure technology bets. So when one of these names moves next, they can't tell whether it's noise or signal.

This is exactly why I separated my four quantum architectures comparison and the quantum IPO wave into their own posts. Build the baseline first. Size after.

The Fear Has Flipped Direction

There's a feeling that arrives at exactly this point in a cycle, and I want you to recognize it before you size anything. Six months ago, the fear around quantum was simple: "What if the science doesn't get there? What if these companies burn through their cash before the technology arrives?" Today the fear has flipped: "What if quantum works and I'm not in it?"

Same companies. Same uncertainty. Same risks. Different fear pointed in opposite directions. If you can feel that shift in yourself right now, that is the signal. It's not a buy signal and it's not a sell signal — it's a pause signal. The fear that pushes someone to buy at the top is the same fear that stopped them from buying at the bottom. It just got pointed at something else.

The $100 Allocation: 50 / 35 / 15

If I had $100 to allocate to quantum today, I'd split it across three tiers. Six months ago I would have put $70 in infrastructure. Today I'm shifting more weight to the pure plays. The reason is simple — the correction over that period gave us better entry points, and the pure-play universe doubled.

Tier 1: Infrastructure — $50

The portfolio anchor. It gets the biggest slice because these names generate real cash flow today while every other quantum company is burning through theirs. AWS, Azure, Nvidia. If quantum fails, these companies are fine. If quantum succeeds — whichever architecture wins — they collect the toll.

Tier 2: Pure-Play Builders — $35

Companies where quantum is the entire business. IonQ, D-Wave, Inflection, Xanadu, Rigetti. The risk is larger, but if the commercialization arc plays out over the next two to three years, this is where the outsized returns come from. I'm willing to put more here than six months ago for two reasons: better entry points after the correction, and the pure-play universe has doubled.

Tier 3: Penny Dreamers — $15

Small bets, big optionality. A single breakthrough could multiply your money — or it could go to zero. Quantum security microcaps belong here: CLSQ (post-quantum encryption chips) and Arqit (quantum-safe key distribution). The reason to keep this tier small is that all of these names are pre-revenue.

The Risk Most Investors Miss: Dilution

One thing is true for every quantum pure-play: they're all burning cash and issuing shares to stay alive. Even if the stock price goes up, your slice of the pie can shrink. That's the basic trade-off with early-stage hardware companies. Price it into your sizing decision before you commit.

What About ETFs?

If you'd rather hold a basket than pick names, that's a valid path. The Defiance Quantum ETF has been around the longest. There are now five more quantum-focused ETFs that didn't exist a year ago. If you want sector exposure without single-name risk, the ETF route is reasonable. Just know that ETFs typically have limited infrastructure exposure, so you'd get less of the toll-collector benefit. If you go single-ETF, I'd add a separate position in the large infrastructure names.

FAQ

Q: Isn't 50% in infrastructure too conservative? A: It was 70% six months ago — moving 30% is already an aggressive shift. Below 50%, the portfolio takes a much bigger hit if quantum fails to scale.

Q: Where does QUBT fit? A: Nowhere. Until the going-concern warning and the securities fraud litigation resolve, I don't slot it into any tier.

Q: Can I just buy a single ETF? A: You can. The trade-off is most quantum ETFs underweight infrastructure. If single-ETF is your path, consider holding the large infrastructure names separately.

The Question to Answer Before You Click Buy

Is the decision you're about to make calibrated, or is it emotional? Quantum is exciting — that's obvious. But "exciting" isn't a basis for position sizing. If you have a baseline, you've recognized the fear-direction flip, and you've priced in dilution, you're ready to size. If any of those is missing, pause first.